The Impact of Federal Funding in West Virginia – Part I
Federal funds play an important role in West Virginia’s economy and make up a vast portion of the revenue the state receives. Historically West Virginia has been provided with a larger share of federal funds per capita than most states. The continued federal support enabled the Mountain State to build up and sustain its programs that assist low- and moderate-income West Virginians, such as Medicaid, the Children’s Health Insurance Program (CHIP), Temporary Assistance for Needy Families (TANF), and many more.
This blog series examines what programs federal funds support, the structure of that federal support, how those funds are administered to facilitate programs, funding levels and how proposed budget cuts could impact West Virginia. President Trump and Republican congressional leaders have proposed a budget that slashes $2.9 trillion over the next decade from programs that aide low- and moderate-income Americans.
In Fiscal Year 2017, the state received an estimated $5.3 billion from the federal government in appropriations, making up 38 percent of the state’s total revenue. That money was dispensed to state agencies to facilitate health care, education, infrastructure projects, community development, and other programs.
Federal funds come into the state in a “match” formula. State government officials first allocate the state’s share and then the federal government allocates its funding based on a matching percentage rate. For instance, if the match rate for a program is 75 percent federal and 25 percent state, then for every dollar the state puts into that program, the federal government will put in three.
Health and Human Services make up the largest share of the federal funds in West Virginia due to Medicaid, which brought in $3.4 billion in FY 2017. The rest of the federal funds go toward a variety of programs across the state. West Virginia operates hundreds of federally assisted programs, ranging in cost from a few thousand dollars to billions of dollars. For a complete catalog of federal funds in West Virginia, consult the West Virginia Consolidated Report of Federal Funding in the West Virginia State Budget Office.
The next post in this series will take a deeper dive into non-discretionary programs supported by federal funds.